The SBCI is Ireland’s national promotional institution. The purpose of the SBCI is to deliver effective financial supports to Irish SMEs to address gaps and potential failures in the Irish SME finance market as well as encouraging competition and innovation, and facilitating the efficient and effective use of EU resources and financial instruments. The SBCI achieves this through the provision of low cost liquidity and risk-sharing guarantee activities that support the provision of appropriately priced, flexible funding to Irish SMEs.
From a policy perspective, the SBCI is not intended to be a bank and its role as a national promotional institution is quite different from a bank. The SBCI does not lend directly, rather, it lends through partner financial institutions, known as on-lenders. If the SBCI were to lend directly to SMEs it would move from working with financial institutions to being in direct competition with these financial institutions. Paradoxically, this could reduce the reach of the SBCI. Accordingly, there are no plans to enable the Strategic Banking Corporation of Ireland (SBCI) to lend directly to SMEs.
As there are no plans to change the operational model of SBCI, no assessment of the likely costs has been done. However, it is likely that there would be significant cost implications in relation to regulation and there would also be state aid and competition issues that would need to be addressed.